Question

Why does targeting an untested market contribute to the riskiness of a product?

a.

It reduces the risk by opening up new opportunities.

b.

It stabilizes the product's performance.

c.

Behavior in untested markets is unpredictable, increasing the product's risk.

d.

It eliminates the need for market research.

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (c).Behavior in untested markets is unpredictable, increasing the product's risk. Explanation:Untested markets pose uncertainty about customer behavior and preferences, making it challenging to predict product demand and performance. This unpredictability increases the risk associated with introducing a product to such markets.

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